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The INCOTERMS (International Commercial Terms) is a
universally recognized set of definitions of international trade terms, such
as FOB, CFR and CIF, developed by the International Chamber of Commerce (ICC)
in Paris, France. It defines the trade contract responsibilities and
liabilities between buyer and seller. It is invaluable and a cost-saving
tool. The exporter and the importer need not undergo a lengthy negotiation
about the conditions of each transaction. Once they have agreed on a
commercial term like FOB, they can sell and buy at FOB without discussing
who will be responsible for the freight, cargo insurance, and other costs
and risks.
The INCOTERMS was
first published in 1936---INCOTERMS 1936---and it is revised periodically to
keep up with changes in the international trade needs. The complete
definition of each term is available from the current publication---INCOTERMS
2000. The publication is available at your local Chamber of Commerce
affiliated with the International Chamber of Commerce (ICC).
Many importers and
exporters worldwide are accustomed to and may still use the INCOTERMS 1980,
the predecessor of INCOTERMS 1990 and INCOTERMS 2000.
Under the INCOTERMS
2000, the international commercial terms are grouped into E, F, C and D,
designated by the first letter of the term (acronym), as follows:
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International Commercial Terms |
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(
INCOTERMS ) |
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GROUP |
TERM |
Stands for |
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